Boehner Gets One Right: Fire Obama’s Economics Team

In a surprising turn of events, Representative Boehner finally got something right: Obama’s entire economics team has got to go. Many have already jumped ship, but unfortunately the worst members remain—including Timmy Geithner and Larry Summers. The sooner they are fired, the better.

Rep Boehner usually spends his time attacking seniors, people with disabilities, dependent children and widows and others on Social Security. He wants to cut their benefits—taking away their livelihood. (here)

However, he has finally found another issue: Obama’s economics team doesn’t care about job creation. (here) So far, nearly three years into the worst depression since the Great Depression, they’ve yet to turn any serious attention to Main Street. The health of Wall Street still consumes almost all of their time—and almost all government funds. Trillions for Wall Street, not even peanuts for Americans losing their jobs and homes. No one, except a highly compensated Wall Street trader, could possibly disagree with Boehner. Fire Timmy and Larry and the rest of the Government Sachs team.

But he’s only half right. According to Boehner, the problem with Obama’s team is that none of them has ever met a payroll. They do not know how to run a business. Hence, he claims, they do not know how to create jobs. What we need is a good, pro-business economics team that will cut taxes and slash regulations. Maybe bust a few unions and get rid of jobs-killing minimum wage laws. Loosen worker safety protection. Eliminate welfare (and Social Security) to increase the work incentive. It is the same old-same old—the Republican “Party of No” platform of the past three decades.

No, that is not the problem with the Obama team. Rather, it was bought and paid for by Wall Street. It is not interested in creating jobs because that is not the mission Wall Street provided. The only hope is to bring in a new team that is not beholden to Government Sachs. No one with any connection to Wall Street firms ought to be allowed in Treasury.

Putting Wall Street people on the economics teams raises two conflicts: a conflict of mission and a conflict of interest. Wall Street has no “dog in the hunt” when it comes to the health of the economy—it just wants to skim 40% off the top, inserting ever more finance into every activity, whether that is health insurance, “peasant” insurance, or “death settlements”. (see here , here , and here) Thus, the mission of Goldman alumni in Treasury is to increase Wall Street’s share. And the conflicts of interest are obvious—top officials at Treasury plan to return to Wall Street, rewarded with high paying financial sector jobs. It is no wonder that Timmy’s team could care less about job creation.

Further, formulating good fiscal policy that promotes job creation requires no experience at meeting a payroll. Running Treasury is not like running a for-profit firm. Government is not a giant business. It must operate in the public interest—not in the interest of a firm, or even necessarily in the narrow interests of firms, more generally. What might appear to be a pro-business policy might actually hurt business at the national level. Sure, firms hate regulations, decent wages and working conditions, and taxes. Many probably would support Boehner’s race to the bottom efforts—trying to lower wages and benefits to compete with the meanest labor conditions on the planet. But at the aggregate level, that policy is self-defeating, as Henry Ford recognized, because it destroys the domestic market for our nation’s output. It would only ensure a prolonged and deeper depression. Putting a business-friendly team into Treasury is probably the worst thing we could do for American business. It is precisely what President Hoover did, and we know how that turned out. The Party of No wants to do it again. Now, just what is that definition of insanity? Oh, right—try the same old policies that failed in the past.

Indeed, the private sector is not going to lead us out of this depression, anyway. Real recovery is going to require government initiative, starting with job creation by government. And we will need direct job creation, with government paying the wages and benefits for perhaps 12 million new jobs. (here) This ain’t rocket science. We’ve got perhaps 25 million people who want jobs (or more hours) and we’ve got billions of hours of work that needs to be done. Government can play match maker. Match 12 million workers to tasks that need to get done. That will create demand for private sector output, which will create more jobs.

So the private sector does have a role to play, but the Party of No’s platform of cutting wages and benefits and regulations is not the answer. Rather, an immediate payroll tax holiday will benefit both workers and firms, lowering the costs of retaining existing workers and of hiring new ones—while boosting consumption out of higher take-home pay. As government employment increases, that will generate the demand required to get Main Street back on track.

So, the problem is not that Geithner’s team does not know how to meet a payroll. Instead, the real tragedy is that the economics team has been running policy that is against the public interest. Policy has been operated in Wall Street’s interest, helping it to meet the payrolls of Goldman and other bloodsucking vampire squids. That is the true scandal, and that is why the Obama economics team must go. This is not a partisan issue. It is a national priority.

Oh, and while we are at it, hire Elizabeth Warren. (here) That, too, should not be a partisan issue. It is a national imperative. If necessary, make it a recess appointment. The Party of No voted against consumer protection. It is steadfastly on the side of predatory lending. Why should it have any say over who will do the protecting of consumers against the predators?

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About L. Randall Wray 64 Articles

Affiliation: University of Missouri

L. Randall Wray, Ph.D. is Professor of Economics at the University of Missouri-Kansas City, Research Director with the Center for Full Employment and Price Stability and Senior Research Scholar at The Levy Economics Institute.

His research expertise is in: financial instability, macroeconomics, and full employment policy.

Visit: L. Randall Wray's Page

2 Comments on Boehner Gets One Right: Fire Obama’s Economics Team

  1. It is not very likely that there are any real options that can be crafted by anyone at this point to alter the current economic landscape of America that is so ominous . . . for the damage has already been inflicted so deeply with full force. And, not until the underlying issues (the US deficit that is steadily clicking away in the wrong direction and the thousands of pages of thoughtless legislation that is the enemy to free markets) are addressed in a thoughtful and honest manner, it will be a matter of time to work through the obstacles . . . hopefully, with the watchful eye of God.

  2. Ok, it is evident that the people running this country into gutter hav never had the luxury of a good education. At what point can you borrow yourself out of debt?? I would like to know that so i could be debt free. All anyone heres is cutting the fat from all these different programs, what about salaries from the idiots that put us here. Thy have sent out very nice letters to all the disabled and Social Security receipants that the will be no cost of living increase due to there being no increase in the cost of living, and then turn arond and give themselves a nice pay raise.

    The only way the problem is going to be fixed is ALL politians be paid based on the average income from the state they represent, as for Mr Prez, he gets an average of all americans pay. That way they want more money then the economy will either set their pay up or down based on their behavior nd choses they make. Make them suffer the same fate as the general populus. When the computation is made to establish he pay, do not forget to add all the unemployed people to the figure to make it as acurite as possible.

    Next, stop all this foriegn aid. If things would change, or people would take the oppurtunity to better ther lives from the help they receive, that would be one thing, but all the aid we supply to must countries doesn’t prove fruitful, rather they continue to sit on their bumbs and cry for more. Let nature do what it has always done, it will find a balance in life with out human intervention.

    Finally, if Afghanistan is harboring terrorist that have attacked Americans, then carpet bomb the entire country until the surrender or get turned over by their on people, then execute them right there in the middle of the street, same thing with pirates. That bullshit will stop.

    Back at home, someone is on death row, fucking execute them, don’t give them a cozy bed, cable tv, three square meals a day for forty fucking years you ignorant sons-o-bitches. They KILLED, kil them back. How much money will be saved there.

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